HCA CEO Richard Bracken will step down as CEO at the end of 2013. / Dipti Vaidya / File / The Tennessean

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R. Milton Johnson

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Richard Bracken, who led HCA Holdings Inc. back to being a publicly traded company and helped it post industry-topping patient volume growth, plans to retire as CEO at year-end.

Milton Johnson, a 31-year company veteran who was named president 2½ years ago and continued as chief financial officer, will assume that role. Bracken, 60, will remain board chairman, HCA said, adding that an internal search is underway for a CFO to succeed Johnson in that role.

Wall Street analysts expect a smooth leadership transition, saying the change is in line with the natural progression at a company with deep management talent. Signs that Johnson was being groomed to become CEO included him taking over more presentations to the investment community, as well as more leadership in quarterly earnings conference calls, said analyst Sheryl Skolnick of CRT Capital in Stamford, Conn.

“It’s the right time — you’re going into (health care) reform, and it’s better to have one CEO leading the company from the beginning through the reform period,” she said. “It also accomplishes one other important thing, which is the separation of the chairman and CEO roles. It’s important, from a corporate governance perspective, that these roles be separated because that provides additional checks and balances.”

A.J. Rice, an analyst at UBS in New York, said timing of the announcement after HCA recently previewed strong second-quarter financial results suggests that Bracken’s retirement didn’t have anything to do with the company’s near-term operating performance. “When they elevated Milton Johnson to president a couple of years back, it sort of designated him as next in line,” he said.

Bracken is stepping down from the CEO post in a strong financial position, having benefited from hefty dividends HCA paid to the private-equity owners that had taken the chain private in 2006 before it returned to being publicly traded in March 2011. The dividends boosted his total compensation package last year to $46 million.

Except for an initial bump in the road post-IPO, HCA’s transition back to being publicly traded worked out well, including for all of its shareholders, said Frank Morgan, an analyst at RBC Capital Markets in Nashville. “(Bracken is) leaving the company positioned well, with good assets in attractive strategic markets that are outperforming, even in a difficult environment, other hospital chains in terms of volume of business generated,” he said.

32 years of service

Bracken has spent 32 years at HCA, becoming president and chief operating officer in 2002, before being named to succeed Jack Bovender as CEO in 2009. He took over the chairman’s role at the end of that year.

With Johnson becoming CEO, Skolnick considers Sam Hazen, HCA’s president of operations, to be next in line for the company’s top position, with Johnson eventually transitioning into the chairman’s role.

Getahn Ward covers growth and development. He can reached at 615-726-5968 or at gward@tennessean.com. Follow him on Twitter @Getahn.